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Rules for buying and selling a home are changing. Here’s what to know.

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When it comes to buying and selling homes, new rules are about to be put in play, five months after the National Association of Realtors agreed to a blockbuster settlement over how its 1.5 million agents across the U.S. are paid commissions.

The settlement — which resolved litigation stemming from a grand jury finding that the real estate group artificially inflated brokerage commissions — brings sweeping changes to the industry, starting tomorrow.

The adjustments come as prospects brighten for the beleaguered housing market. Mortgage rates earlier this month tumbled to their lowest level since April 2023, offering hope to house hunters priced out of the market given high borrowing costs and home prices that reached a record in June. 

Still, the current rate on the 30-year fixed loan stands at about 6.5%, or more than double the sub-3% rates available in 2020 and 2021. The Federal Reserve in September is widely expected to reduce its benchmark interest rate, a step that should reduce mortgage rates currently high enough to bring turnover in the housing market near 40-year lows. 

In the meantime, real estate agents across the nation will have to adopt to new changes that could potentially reduce the commission that home sellers are asked to pay. 

Many experts are now looking for home prices to fall as the sticker price will no longer include the steep commissions that have for decades been in play.

Here’s a rundown of what this means for those looking to buy and sell homes going forward.

Buyers beware

Real estate agents are now required to have buyers sign a form before showing them a home. The agreements are intended to detail exactly how much a buyer will be expected to pay an agent. 

However, “at that stage, the buyer hasn’t had an adequate opportunity to evaluate that agent,” Steve Brobeck, a senior fellow at the Consumer Federation of America, told CBS MoneyWatch. “When you’re touring houses with an agent, the agent is auditioning to be your agent, that’s when you get to know the agent.”

Most buyers would not be comfortable signing a contract with a financial obligation that early in the process, added Brobeck, who noted that the new requirement came at the industry’s behest and was not part of the NAR’s settlement.

Buyers should not sign a contract with a financial obligation until they are ready to make an offer, advises Brobeck. “There are other options for seeing a house,” he noted, including calling the listing agent or attending an open house. 

Another option that is increasingly in use are touring agreements that cover limited amounts of time and come without financial ties, he said, noting that Zillow had developed one. Many model contracts developed by the industry are difficult to read, understand and are otherwise problematic for consumers, Brobeck warns. 

That said, one buyer-broker agreement developed by real estate brokerage eXp Realty is “simple, consumer-centric and meets most of our criteria,” he said. “They’ve made it available for the industry to use.”

Homebuyers should also think about offering a flat fee or paying their agent an hourly rate, the advocacy group advised.

“The dollar value of today’s percentage commissions is often underestimated by buyers. Moreover, buyer agents should not have a financial incentive to be paid more the higher the sale price,” Brobeck said in a report.

Sellers rejoice?

For folks selling their homes, the changing landscape should bring some quick respite, as their agents no longer have to make an offer of commission to buyers’ agents. 

Nearly 9 in 10 home sales are handled by real estate agents affiliated with the NAR, the nation’s biggest trade association. It required that home sellers figure in a commission rate, usually 6%, before listing homes on its property database, known as the Multiple Listing Service, or MLS.

The commission borne by home sellers was then divided between agents for the seller and buyer. While on paper subject to negotiation, the fee was the focal point of the lawsuit lost by the NAR and brought by a group of home sellers, who claimed the trade group and others colluded in driving up the commissions.

In June, the median sale price of a home was $442,451, according to Redfin. Under the previous practices sellers would be paying $26,547 in commissions. That customary rate is no longer the default.

Sellers can now expect to be asked for just one side of the commission pot, or what would now average 2.5% to 3%. 

“For the first time now, buyers will have the opportunity to negotiate the buyer commission,” said the CFA’s Brobeck. “We suggest setting a target of 2% or less,” the advocate said. Matched with the buyer agent’s commission that would mean paying overall commission closer to 4% rather than the current standard of 5% to 6%, he added.

In a separate but related development, almost any American who sold a home in the last fives years is covered by the class-action settlement with NAR and other brokerages. How much anyone is entitled to depends in part on how many sellers submit claims, and other factors including where one lives and when your home was listed. 

To see if you’re eligible, check here. 

More from CBS News

Kate Gibson

Kate Gibson is a reporter for CBS MoneyWatch in New York, where she covers business and consumer finance.



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The NAR settlement comes into effect today: Here’s what changing and why | CNN Business

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CNN
 — 

On Saturday, a new set of rules governing how most real estate professionals do business in the US officially take effect — and the changes could potentially upend how Americans buy and sell homes.

The rules were agreed to by the National Association of Realtors, the powerful trade association that counts 1.5 million members, as part of a $418 million settlement into antitrust claims. The rules are designed to transform the way Realtors get paid and who pays them. It’s the largest change to the organization’s rules in at least a generation.

In a statement, Kevin Sears, NAR’s president, said that the changes “help to further empower consumers with clarity and choice when buying and selling a home.”

“I am confident in our members’ abilities to prepare for and embrace this evolution of our industry and help to guide consumers in the new landscape,” he said.

Here’s what you need to know:

Historically, buyers were not expected to pay their real estate broker directly. That’s because Realtor commission fees — to both the buyers’ agent and the sellers’ agent — were paid by a home seller.

Commissions usually total 5% or 6% of a home’s selling price, so for a $450K home, roughly the average price of a home in the US, a seller would be responsible for $27,000 in fees. Many experts have said these commissions have been baked into a home’s listing price, inflating home prices.

But beginning this week, seller’s agents will no longer be allowed to advertise commission fees to buyers’ agents on multiple listing services that Realtors use to list and find homes for sale and to facilitate transactions.

That means that a buyer’s agent can no longer use the database to search for houses based on how much they’ll get paid, a practice called “steering,” which led some agents to skip over showing homes that fit their client’s criteria solely because a seller was offering below-market commission rates, critics allege.

“By not having commission on the MLS anymore, it makes it harder to steer, because you can’t just do a search for 3% commissions,” said Tanya Monestier, a professor of law at the University at Buffalo School of Law. “You can still call everyone up and figure out what the lay of the land is, but this just makes it much harder.”

The second change affects the relationship between prospective home buyers and their real estate agents. Buyers must now sign a legally binding representation agreement with their agent before they can begin touring homes together.

These agreements are designed to inform home buyers how their agent gets paid,­ and if sellers do not agree to pay the agent’s commission, the buyer may be on the hook for that payment. They’re also designed to inform buyers that this commission is fully negotiable.

“The idea is if buyers are aware that they can negotiate commissions and that if they, in fact, do pay them, not the seller, it might create a more completive market and possibly a menu of services in the future that would be more comparable to other developed countries,” said Norm Miller, professor emeritus of real estate at the University of San Diego.

A key element to these agreements is that a buyer’s agent cannot receive more compensation than what the buyer initially signed onto, even if a seller is willing to offer more.

On its website, NAR said that these two changes have “eliminated any theoretical steering, because a broker will not make more compensation by steering a buyer to a particular listing because it has a ‘higher’ offer of compensation.”

The final approval hearing is scheduled for November 26, but a judge granted preliminary approval of NAR’s settlement in April.

Some brokerages have realized that buyers may get nervous about signing anything that commits them to a legally binding relationship with an agent before they begin touring homes. So, they created shorter-term contracts that cover a week­ or maybe even an hour for buyers to get comfortable with an agent before committing.

But, Monestier cautioned that buyers should be careful about signing any kind of legally binding contract without giving it a thorough read.

“You’re going to see all sorts of different versions of these agreements that are going to vary, state-by-state, brokerage-to-brokerage. There may end up being thousands of them out there,” she said. “It concerns me that buyers and sellers may sign something blindly and then be surprised when things are not as they think.”

Leo Pareja, the CEO of eXp Realty, one of America’s largest brokerages, told CNN that he drafted his company’s buyers’ agreements with simplicity in mind to head off potential confusion.

“It is designed to be something that a consumer could read in the driveway of a house without feeling put in an uncomfortable situation,” Pareja said. “You don’t need a law degree to read it.”

Pareja decided to make his contracts widely available so that they could be used by other firms, as well.

“We just want consumers and agents to have the least amount of friction going forward, because that’s the last thing we need right now,” he said.

Some real estate professionals have warned that the new rules could have a chilling effect on the home-buying market since more buyers may now be expected to come up with cash to pay their own agents.

But Monestier said that she believed in the long-term, the changes would help consumers.

“I would say the better thing for home buyers and sellers is if commission rates were to go down over time,” she said.

It remains unclear whether the cost of buying and selling homes in the US will immediately become cheaper for most people, though.

“I suspect somebody out there will eventually say, ‘let’s compete on price.’ If it’s a big firm, that could cause a revolution,” the University of San Diego’s Miller said. “But when would that happen? I don’t know.”

In the short-term, Miller believes mortgage rates will have a larger impact on home affordability than any particular rule change.

The rate for an average 30-year fixed mortgage recently hit 6.49%, still elevated compared to recent history but near the lowest levels in more than a year.

“That has a whole lot more effect on affordability than anything we’re talking about here,” said Miller. “If mortgage rates come down further, rule changes will just be noise in the equation, compared to that.”



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The home buying and selling process is changing. Here’s what you need to know in Illinois.

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Save up money. Find a real estate agent. Attend open houses. Put in an offer … or two or three or four. 

Once the deal is closed, real estate agents for both the buyer and seller get paid commissions, typically by the seller.

This is a condensed version of how the home buying and selling process has functioned for years. And this process is about to change. The way real estate agents get paid will shift on Aug. 17, following massive settlement agreements that resulted from numerous class-action, antitrust lawsuits brought by home sellers over the commissions they paid to real estate brokers. The suits were filed against the Chicago-based National Association of Realtors and real estate brokerages nationwide.

In March, NAR agreed to pay $418 million as part of a settlement to resolve litigation against the organization and its members. It also agreed to amend its model rules. The settlement will be paid out over approximately four years, and around 50 million people will be eligible to receive money from NAR’s settlement. Some real estate brokerages opted to settle their own suits before and after NAR’s agreement, and some are still ongoing.

The full NAR settlement is not expected to receive final court approval until November, with the U.S. Department of Justice indicating that the terms of the settlement may not go far enough.

NAR’s settlement came after a Missouri federal jury issued a landmark $1.8 billion verdict in October of last year, finding NAR and several large real estate brokerages conspired to artificially inflate commissions on home sales. A similar case was expected to go to trial this year in Illinois federal court. The settlement resolved NAR’s role in both of those suits plus two other class actions. NAR continues to deny any wrongdoing, according to the association.

The litigation came to a head amid internal turmoil at NAR, which has undergone a series of leadership changes. Over the past year, NAR has seen two presidents and a CEO resign following allegations of sexual harassment against its former President Kenny Parcell.

Here’s what you need to know about the landmark settlements and how the changes being implemented will affect buyers, sellers and real estate agents in Illinois. 

What were home sellers arguing in their lawsuits against NAR and real estate companies?

The lawsuits claimed the compensation practice for brokers was anti-competitive because it incentivized buyers’ agents to steer their clients toward sellers who were offering higher commission rates in their listings on the Multiple Listing Service. The MLS is the main tool used by real estate agents across the country to market home listings.

Historically, the seller set the commission rate when listing the home for sale and then paid the fee to their agent, who split it 50-50 with the buyer’s agent.

How is the National Association of Realtors changing its rules?

NAR is changing its rules in two main ways. It is requiring potential homebuyers to enter into written agreements — often referred to as buyer agency agreements — with their agent that state how the buyer’s agent will be paid. NAR is also removing offers of compensation to agents in the MLS.

If a broker is not a member of NAR or does not use an MLS platform that adheres to NAR’s rules, they will not be subject to these rules changes.

Can cooperating commissions be listed outside the MLS?

Some real estate brokerages are still permitting their agents to list cooperating commissions on their real estate listings outside the MLS, while others are not. A cooperating commission is the amount paid to a buyer’s agent once a transaction is closed.

Redfin will allow sellers who want to advertise an offer of compensation to do so, but will not require it, according to a statement from a company spokesperson.

Compass agents will follow a similar practice, with a company spokesperson saying it will be an “agent-by-agent decision with their clients.”

A RE/MAX spokesperson said in a statement that while the firm will not display offers of compensation on the company website, each RE/MAX office is independently owned and operated, and “it is up to offices to determine what works best for their office.”

Laura Ellis, chief strategy officer and president of residential sales at Baird & Warner, said her company will not allow its agents to list buyer or seller agent compensation on any platform.

“We will not do that because it’s going to put us right back to how we got into the situation we are in now,” Ellis said.

Mike Golden, co-CEO of @properties Christie’s International Real Estate, said that as of now, similar to Baird & Warner, the company does not have plans to list cooperating commissions outside the MLS.

“We feel like that is in direct conflict with what the Department of Justice’s goals are with the settlement,” Golden said.

On a call with reporters on Aug. 7, NAR said it would not tolerate “people making attempts to circumvent those policy changes,” but declined to comment on particular brokerages’ practices when asked after the call.

Realtors group to pay $418 million to settle litigation over broker commission fees

What does this mean for potential homebuyers?

Homebuyers will now be required to enter into written contracts with their agents before the first tour of a home if working with an agent who is a member of NAR or an agent who is using an MLS that follows NAR’s model rules. The contracts will dictate how much the buyer will pay — in either a dollar amount or percentage — their real estate agent in the event that the seller does not cover any or all of the buyer’s agent commission.

These contracts do not have to be signed if a buyer chooses not to work with an agent, if a buyer visits a for-sale home on their own or if a buyer is working with an agent who does not use a NAR-affiliated MLS. Some states already required these written buyer agreements. Illinois was not one of them, but many brokerages began encouraging their agents to use the agreements after the Missouri verdict came down.

In Illinois, there are five primary MLS platforms, and they are all implementing the changes, according to a spokesperson from Illinois Realtors, a local NAR chapter. MLS platforms also have the option to disaffiliate from NAR if they do not agree with certain model rules, according to NAR.

Even when the litigation was still winding its way through court, local real estate firms said it was no longer assumed sellers would foot the bill for both the listing agent and the buyer’s agent.

Ellis of Baird & Warner said it is still “highly likely” that buyers will ask sellers during contract negotiations to offer a concession or closing cost credit so they can pay their agent. Commission costs have typically been baked into the price of the home, something the DOJ wanted to clarify for buyers with these rules changes, Ellis said.

A landmark jury verdict threatens to upend home buying and selling. In Illinois, changes are already underway.

Do these rules apply to VA-backed mortgages?

Veterans with VA-backed mortgages are allowed to pay buyer broker fees as of Aug. 10. Prior to the settlement agreements, per the policy for VA-backed mortgages, veterans buying homes were not allowed to pay a buyer’s agent commission. The VA amended its policy in light of NAR’s rules changes because veterans could have been at a disadvantage in the homebuying market if they could not offer to pay an agent’s commission, according to the VA.

What does this mean for potential home sellers?

Sellers will maintain their ability to offer a buyer’s agent compensation or to choose not to. A seller’s agent will, however, no longer be able to list cooperating commission percentages on the MLS. If a seller does choose to cover a buyer’s agent commission, the compensation must not exceed the amount the buyer agreed to pay their broker in their buyer agency agreement.

Conversations surrounding agent commissions can still occur during the contract negotiation process for buyers and sellers.

Golden of @properties said his company has seen that sellers are still largely paying buyer’s broker compensation.

Erika Villegas, president of the Chicago Association of Realtors, said she has not seen large numbers of sellers stop paying commissions to buyers’ brokers.

“What I am seeing is that we are having a more transparent conversation with our sellers about all the choices that they have,” Villegas said. “Sellers have always had choices, but I think that we are making it even clearer now.”

Will the costs of hiring a real estate agent go down?

Data already show that commission percentages have been decreasing for years. And attorneys say they expect the rules changes will lead to lower commission fees because agents will be forced to compete on service.

Since the NAR settlement, average buyer’s agent commission percentages have declined locally and nationally, according to recent data from Redfin. In Chicago, the average commission was 2.35% for the four weeks ending July 14, 2024, compared to 2.44% for the four weeks ending Jan. 28, 2024. Nationally, buyer’s agent commissions have declined from 2.62% to 2.55%. Redfin said these trends follow yearslong gradual declines, but buyer’s agent commissions in dollar amounts are up this year due to rising home prices. 

In the past, real estate agents were typically compensated 5% to 6% of the purchase price of a house by the seller, an amount that usually got split in half between the buyer’s agent and the seller’s agent. Local real estate agents maintain the commission percentage has always been negotiable. NAR vehemently denies that there were ever “standard” commissions and also says its members’ clients have always been able to negotiate commissions.

Golden of @properties said he has not seen commission percentages go down.

As workers return to the office, residents are moving back to Chicago and other cities, driving up home prices

What do these changes mean for the real estate industry as a whole?

It is still too early to know exactly how the policy changes will affect potential homebuyers and sellers.

“I just think it’s going to be a bumpy ride for a while,” Ellis of Baird & Warner said.

But some signs of a changing market are underway. Ellis’ firm is seeing agents leaving their roles and expects to see more do the same, she said.

At the end of June 2023, Baird & Warner had 2,226 agents; for the same time this year, the firm had 2,161 agents, an approximately 3% loss of the company’s agent headcount, with no notable decrease after the settlement announcement in March, Ellis said.

Ellis said it’s hard to tell if agents are leaving because of the Aug. 17 changes. She thinks it is more likely due to the challenging market conditions. Either way, she believes it is a “good thing,” Ellis said.

“The Realtors who are going to survive this and thrive are your really high-integrity, highly professional, really smart agents, and I think that is better for everybody,” Ellis said. “The bar of entry was just too low in our industry.”

In its second quarter earnings, RE/MAX reported a 3,581 decline in its year-over-year U.S. agent headcount, a 6.3% decrease, as of June 30.  

Villegas of the Chicago Association of Realtors said the trade group has not seen a dropoff in membership since the settlement announcement but a “re-engagement of members” to make sure they are prepared for the changes.

Redfin has seen its agent headcount tick up by 61 nationally, a roughly 3.7% increase, between the first and second quarters of this year. Compass saw an even bigger increase in its headcount due to recent acquisitions, according to its second quarter earnings report.

Golden of @properties said his company has not seen any unusual attrition following the settlement agreements, and the company has already been navigating some of the market changes in Indiana, as buyer agency agreements became mandatory in that state July 1. So far, it has been a “pretty seamless process,” Golden said.

“Every brokerage company is faced with the same questions and faced with the same changes, and every company will adapt in their own way,” Golden said. 

ekane@chicagotribune.com

Originally Published: August 13, 2024 at 5:00 a.m.



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With Real Estate Commission Rules Changing, Should I Wait to Buy a House?

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“I want to buy a house soon, but I read that real estate commissions are going down. Should I wait until the new rules are in place?”

You’re right to step back and re-strategize your home purchase after the National Association of Realtors’ recent legal settlement. If it’s approved by the court, the real-estate industry is on the precipice of change that could impact the home buying process and what you pay for it. Whether it’s best to act now or to wait, though, will depend on your budget, how much work you want to put into the process and your need for certainty.

Here’s the gist of what’s happening: Lawsuits were filed against NAR, a trade group representing 1.5 million real-estate agents, questioning its cooperative-compensation rule. Under this rule, sellers cover the commissions for both their agent and the buyer’s, with the cut offered to buyer’s agents advertised in an agent-facing database known as a multiple listing service, or MLS. Critics say the practice reduces competition and inflates commissions and home prices.

In March, plaintiffs accepted a settlement proposed by NAR, which would remove offers of compensation from the MLS and require agents to sign contracts with buyers. The rules are expected to ultimately lower costs, however, buyers may need to pay agents out of pocket. If approved by the court, the changes are set to go into effect in August.

With this all in mind, there is no hard-and-fast answer as to whether you should buy now or wait until those changes roll around. There are, however, cases for both paths.

The case for buying now

If you want a full-service agent and assurance that the seller will foot the bill—then buying before July is probably best.

“The NAR settlement is creating lots of uncertainty, and if there’s anything people don’t like when making major life decisions and purchases, it’s that,” says Dana Bull, a real-estate agent and consultant in Massachusetts. “If you buy right now, you’ll have a greater sense of what to expect.”

By buying now, you’ll likely fall under the existing agent commission model where the seller pays. The total is usually 5% to 6% of the home price—with 2.5% to 3% going to each agent. In exchange for that cut, your agent will usually suggest listings, tour properties with you and negotiate on your behalf. Depending on what state you live in, they may also draw up contracts and attend your closing.

“The home buying journey will not be altered—at least for the next few months,” says Alyssa Brody, co-founder of Development Marketing Team, a real-estate brokerage with branches in New York City and Miami.

The case for waiting

If you’re comfortable negotiating and willing to handle some of the home-search process on your own, waiting to buy could pay off. “If you’re more focused on maximizing your investment and minimizing costs, waiting until the new rules come into play could be beneficial,” Brody says.

Starting in mid-August, buyers will sign a separate contract with their agent, opening the door for negotiation. Some agents may charge an hourly rate or offer a la carte services. This would allow buyers to choose which services they want to do themselves (browsing listings and touring homes, perhaps) and which they want to pay for (maybe negotiating and drawing up the contract).

Additional savings could come from lower home prices. With sellers no longer footing the bill for buyer agents, some experts believe they will sell their homes for less.

This all depends on market conditions, though, and agents broadly agree that prices are unlikely to drop much in the short-term. By summer, the Federal Reserve is expected to start cutting interest rates, which means lower mortgage rates and higher demand. “With our limited inventory, competition will be fierce,” says Bret Weinstein, founder of Guide Real Estate in Englewood, Colo.

If you choose to wait, be ready for a bumpy ride. “It will cause a shake-up, and no one knows exactly how the open market will react,” Bull says. “There will be lots of confusion, and as a buyer, you could be stuck in the crosshairs while the entire industry adjusts to the change.”

To sell or not to sell

The considerations are similar if you’re on the fence about selling. If you are comfortable with the existing model, sell now. For the lowest costs, you might want to wait until August.

Take note, though: Not everyone is convinced things will change once the new rules are in place. “I believe sellers will continue to pay buyer agents in big markets like Los Angeles, because it’s in their best interests,” says Michael Nourmand, president of real-estate firm Nourmand & Associates in Beverly Hills, Calif. “It’s best for buyer affordability, they don’t want to limit their buyer pool, and negotiating a commission is another variable that could derail the transaction.”

Talk to a few real-estate agents about the pros and cons of skipping the buyer-agent commission in your area. They can advise you on what it might mean for your sale, given current market conditions.



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The Realtors settlement is already changing the way some Americans buy and sell homes | CNN

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CNN
 — 

The seismic settlement announced by the National Association of Realtors earlier this month has not yet been approved, but it is already sending shockwaves through the real estate industry.

The mere prospect of a future settlement has already caused some Americans to change their behavior when buying and selling their homes. Some prospective homebuyers said they plan to restart their housing search after the new rules are in place in hopes of finding lower home prices, while some homesellers aren’t waiting for the new rules to take effect in July to lower — or even eliminate — the commission they offer to buyers’ agents.

Housing experts say the $418 million settlement will effectively demolish the current real estate business model, in which home sellers pay both their agent and their buyers’ agent, which critics say inflated housing prices.

If approved by a judge, the settlement comes with new rules for Realtors.

“This is unchartered territory,” said Debra Dobbs, a Realtor in Chicago, of the potential new rules.

The new rules could help lower home prices, experts say.

That’s what Jeremy Cannon, a 34-year-old teacher in Corona, California, hopes.

Last year, Cannon and his wife tried to buy their first home, putting in offers for multiple properties.

“All of our offers got denied because other people were bidding higher than us,” Cannon said. “We were already trying to bid above asking price for pretty much every place.”

At the time, Cannon decided to hit pause on his dream of owning a home. But, to Cannon, the new rules established by the NAR settlement could potentially clear what felt like an intractable hurdle for him: the high cost of housing.

Sales commissions, traditionally shared between a buyers’ agent and the agent who lists a home on the market, are usually between 5% and 6% of a home’s selling price. The median price of a home in the US is $417,000, according to census data, meaning the average seller could be paying more than $25,000 in brokerage fees.

Groups of sellers brought lawsuits against the NAR for this practice, alleging it was a violation of antitrust laws.

Under the proposed settlement terms, sellers’ agents will no longer be required to offer to share their commission with buyers’ agents, uncoupling commissions from home prices and opening the door to a more competitive housing market.

Many experts believe commission costs have been baked into home listings prices. Lower commissions could mean lower home prices.

“I think it could be helpful,” Cannon said. “I hope it might be cheaper and bring the prices of houses down more.”

He now plans to restart his home search this summer.

A price drop would be a much-needed reprieve for Cannon and others looking to buy a home: the median sales price of a new house has surged 21% since January 2020, according to census data.

The new rules also require agents to enter into written agreements with their buyers. Many agents plan to stipulate that if a home seller does not agree to pay their commission, their buyer is on the hook for that money.

But Cannon said if buying a home becomes more affordable, he would be willing to pay out-of-pocket for an agent, as long as it is “someone who has my interests in mind.”

Matt Hanley, a 49-year-old who works in insurance in Minnesota, has lived in his home since 2007. He was reacquainted with how real estate transactions work when he recently purchased a new home.

“We were confused,” he said. “I’m like ‘wow, I’m surprised the seller has to pay my agent’s commission.’ It seemed like a conflict of interest.”

Hanley now plans to list his home in April. After the NAR settlement was announced, though, he changed course: Instead of offering to pay a commission that would be split between his agent and his future buyers’ agent, he asked his agent to write “0%—negotiable” as the buyers’ agent commission on his home’s listing page.

“Why wait for the settlement? This is common knowledge now,” Hanley said. “I’m going to try to be at the start of this bell curve.”

Hanley’s experiment may be premature, though. The new rules will prohibit agents’ compensation from being included on centralized listing portals, which some critics say led agents to push more expensive properties on customers. But, for the time being, buyers’ agents will still be able to see that Hanley isn’t offering them compensation, potentially disincentivizing them from showing his home to clients.

But Hanley pointed to favorable conditions in his market as a reason that he believes buyers may still consider purchasing his home, even if they have to pay their realtor out-of-pocket.

“We’ve got everything going for us. We have no inventory in our area and we’re selling at peak time, so we said, ‘Let’s try it,’” he said. “If someone really wants it, they’re going to come up with their buyers’ fee.”

“They should be reporting to their agents, we should be reporting to ours,” he added.

Mariya Letdin, an associate professor of business at Florida State University, said this settlement has helped raise awareness that people have a right to negotiate. Even so, Letdin said it’s possible that the status quo is maintained.

“It’s up to the consumers on both the seller side and the buyer side to bring this to wide use,” she said. “I think it will take more than just a ruling. I think it will take consumers advocating for themselves and not being passive.”

“They now have a legally protected voice, and they should use it if we want to see change happen,” Letdin said.



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